ben bernanke is masterful. lots of people complained about him. i see there's nothing to complain about. he's doing the right thing. he doesn't want a repeat of 1937. i don't want one either. i promise to find it right here for you on "mad money." seem jim cramer. see you tomorrow! welcome to today's "worldwide exchange." i'm kelly evans and these are your headlines from around the world. politicians in brussels and moscow are scrambling to come up with a plan b for cyprus. the president of the euro group saying a bank levy is inevitable. russia is criticizing eu's handling of the crisis as a summit of the two sides happens to get under way. through takes a nose dive after disappointing data.

germany's manufacturing sector unexpectedly contracts. and chinese factories manage to post a rebound in march after during a lunar new year giving hopes that a gradual growth recovery is on track. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> okay. welcome to this edition of "worldwide exchange." so many fast-moving fluid events across the eurozone. only as we're trying to follow what's happening in cypress, we're getting word that generally speaking the economic situation continues to deteriorate, continues to disappoint. the flash composite index for the eurozone, if i can just bring it up here, the manufacturing eurozone composite is 46.6. that compares with a 48 reading in the reuters pooled forecast.

in terms of services, it doesn't seem as though the news is much better, 46.5 versus an expected 48.2. let's get immediate reaction from rob doddson, senior economist. we're talking extraordinary weakness here, especially in the two most important economies, germany and france. >> yes. what we saw towards the beginning of the year, what we were hoping was we would see in the u.s. in the second quarter and maybe a third number. what these number res sharing, while we're seeing the rate of contraction to ease in the third quarter, around 4.6% declines. what we saw at the end of the quarter, regathering momentum and that puts the usa in a weak position heading into the second quarter. >> i was going to ask, too, the there's any way, these are sentiment surveys. these are not going on out and measuring production. what it does, it oles the

companies themselves, asks them about data. pretty reliable whether it's the u.s. version of these or the global ones with tracking equity prices. and the point here is, this is the first reading of sentiment in march. yet it doesn't seem as though this was necessarily nud by the latest out of cypress. this would have all fallen before this happened. >> yeah. it's asking for hard information whether it is high or lower. it is measuring much more what is happening in reality as opposed to just aspects of confidence. we are getting real insight into what is happening in the real economy and how weak it currently is. the data collection period, yes, most of that data would have been collected before the cypress story at which point we have no idea as of yet what impact that will have if it hits household confidence, if it hits business confidence on the real economy going forward. with the eurozone in recession now, this suggests that the eurozone will continue to and that weakness, bailout mode,

could they have -- >> and here you can see the reaction in the euro and, in fact, across major indexes as we just saw there. it's been sharply negative. i wonder, though, if this opens the door for the european central banks. even as inflation measures have been falling, it has basically stood pat and i wonder if this doesn't begin to change sentiment around it coming out and starting to cut rates further. >> well, they did say they would do whatever it took to ensure thor row zone and the euro was secure. in which case, maybe it's time for them to make good on that promise. >> one final point before we talk china with regard to this data. do you get a sense of what's driving the weakness here? is it just fundamentally there's no demand, this is a weak economy and we're in this negative spiral? >> there's no command on the back of data and shows that business optimism in the eurozone is also pretty weak. but yes, we listen to demand.

eurozone country trade with each other. if they're all doing pretty weak, that will have a knock on effect across the region. periphery outside of the big two economies down to an acceleration and even germany slowing and with the manufacturing sector unexpectedly contracting. >> we have people saying maybe by tend of the year, spain or greece or maybe some of these harder hit peripheral economies not seeing evidence of it so far here. i want to briefly ask you about the china data. we thought maybe we would start the session on a better note because china's slash pmi climbed to 5 is.7 in march, suggesting rebound after slow growth in the lunar new year. price pressures have released maybe giving more room for china's policy on an even keel. initiate response here? >> china, if it's doing well, back drops of some of the weakness in the eurozone, this is suggesting that china gdp will pick up in that 7.9% in the

fourth quarter. >> at least a spec of good news. thank you for coming this morning. cypriot lawmakers are continuing talks this morning on a plan b to save the country from bankruptcy. yesterday, ministers discussed monies needed to rebuild the banking system. they include nationalizing the pension funds of semi private corporations, meanwhile, the cypriot finance minister remains in moscow where he is trying to hammer out a deal for a loan with all options on the table including a natural gas lock. any agreement must benefit russia and is all this after the russian prime minister dmrooet dimitry medvedev turned the blame on eu commissioners. he said the block had behaved like, quote, a bull in a china shop. saying he was hopeful t a

solution would be reached. >> the european commission stands ready to assist finding an agreement and, in fact, as you know, consultations are going on between cypress and the other members of the euro group to find a solution. we have in the past solved bigger problems. i hope that this time a solution can also be found. >> let's get more reaction on the ground from nick, carolin and ross following the story. carolin, first to you. it's interesting, this meeting between the eu and russia was supposed to happen well before any of the cyprus concerns came to the fore. when we started to hear from barroso this morning, he was going on and on about russian literature. it would seem developments are far more urgent than he was perhaps going on. >> it was great, wasn't it? we got a russian history lesson,

a lesson about literature and philosophy, as well. we also got a quote from churchill. he said the people often forget the second part of that, that is the key to understanding russia is to understand where its national interests lies. do you not think the european commission might have listened to those words and thought about it before they came one this debt 2k079 depositor's deal? anyway, it was all sweet between barroso and medvedev. but the fact remains, there are better divisions and you and i were looking at the comments from medvedev, as well, saying pull in a china shop, undermining, acting in an inappropriate 21st century way, akin to how the soviets may have taken property off of everyone. made every mistake they could have made. that is what medvedev said yesterday. today, of course, the eu and the russians are trying to find a

common part of that, but a whole host of issues, as well. i sent out to the news room the whole agenda for this meeting today. the areas where they could participate mutually in going forward, the areas where the russians can invest into the eu and the eu can invest into russia, i thought that was wonderfully ironic given cyprus as a back drop. i.e., they seem to be doing everything they can do at the moment to find areas where the russians can't invest in europe and europe can't invest in russia. plus the concerns over energy, human rights and syria, as well. so the eu and russia are at logger heads on so many issues, not that you would have known it by listening to this today. anyway, let's get back to what michael sarris is doing. i thought he might be scurrying around the edge. we're trying to find out his

whe whereabouts at the moment. we know he's going to have a one-on-one with mr. medvedev later on and speak to the president, as well. whether they can work something out, that remain toes be seen. but all talk about property deals, about banking deals and energy deals, at the moment, i would suggest that tensive and a little bit premature. kelly, back to you. >> steve, thanks very much for that. any deal with russia may be premature certainly isn't going to calm things in cyprus. this morning, the european central bank in a statement has said in order to continue its emergency liquidity systems past monday the 25th, cyprus has to have a bailout in place. any prospect of that? >> well, that adds a sense of urgency to the situation. timing is really crucial here. and now with this ultimatum from the ecb, the cypriot banks are hoping that a deal can be found as soon as possible. because what they've been

relying on over the last couple of days and weeks is that eoa assistance from the ecb. that, kelly, is the main reason why they have been able to stay solve solvent. but i want to come back to a point that steve brought up this morning. but would one bailout deal even be enough? 5.8 billion euros don't seem enough when the banks do reopen next tuesday and we're likely going to see big depositit outflows. one economist i talked to this morning said to me, what's really likely at this point is that we're going to see a second bailout by the ecb potentially. so 5.8 billion may not be enough in the end. meanwhile, as long as a deal with russia is not materializing on moscow, lawmakers here are desperately trying to find other solutions to raise some amount of money. whether or not that's going to be the full 5.8 billion ur he rows, they're talking about this investment company into which state pension funds would be transferred and would be able to

issue a gap back bonds and, of course, old ideas are being revived, the idea of a depositit tax is coming back to the table. but we know, of course, just how unpopular that was. kelly. >> exactly. we seem to be almost back to where we started. carolin, thank you so much for that. carolin and steven both following these developments for us. let's check on market reaction in asia. there's plenty going on in the world aside from cyprus. li sixuan joins us with the latest. eye, sixuan. >> thank you, kelly. markets in asia ending on a mixed note. there are lingering concerns over cyprus and north korean threats. political uncertainty in australia add add pressure on the markets. the asx 200 closed down 0.2% amid julia gillard's leadership.

the main data point today was hsbc china flash pmi data for march, showing a rebound in the country's manufacturing activity. with concern, financial sector risks, housing bubbles and inflation, beijing may need to compromise growth to control medium term risks. the shanghai composite eked out a modest gain of 0.3%. in hong kong, the hang seng ended marginally lower ahead of the more corporate earnings. shares slipped more than 10% after brokerage's downgrade despite results meeting expectations. elsewhere, the nikkei 225 gained more than 1% to close out a fresh 4 1/2 year high. the south korea kospi eased 0.4% today. banks continued to be the worst

hit sector, this after cyber attacks triggered out ages of some banks and broadcasters yesterday. india's sensex still on the move now trading along the flat line. back to you. >> sixuan, thanks very much for that. a checkered pattern as you can see across asia. by the way, australia has something to do with revived hope for spending across these european names. first, i want to show you the market act action here. we're looking at futures which despite the color take the value into account. 14,416 is the level for the dow. here is a look at the european markets that we want to show you, as well. the meeting where we're hearing from the euro group chairman where he's under intense pressure, taking questions about the deteriorating situation economically in europe and with regard to budget targets like, say, france, he said countries who miss targets will need a, quote, damn good reason for

doing so. his words, not mine. the ftse mib negative down 0.4%. the ibex 35 giving up 0.5% in spain. the xetra dax one of the hardest hit down 0.7%. this after the german data showed surprise manufacturing activity in its flash pmi estimate. services disappointed, too. the ftse 100 also taking it on the chin this morning. here is a quick look at the bond space. an important one to watch. we're still seeing prices rally for spain and italy, meaning the debt has fallen to 4.95% and 4.6 respectively. we're seeing the bid into periphery and out of the safer haven trades this morning. can it continue? this will be the question. here is a look at forex. the euro has been a reasonable guide lately with regard to risk. today it's giving up 0.2%. this is one cowatch particularly if it drops below that 1.29 level. the dollar/yen showing some strengthening down about 0.3%.

and sterling, again, catching a bid on the back of both the budget statement yesterday and the slightly more hawkish minutes than were expected from the bank of england. straight ahead on the program, any more going on after we take a quick break. we'll come back and talk about the australian prime minister julia gillard who has survived the political challenge and is it was future for the ruling labor party? we'll have the latest from sydney when we come back. zap technology. departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz.

welcome back to the program. a contentious atmosphere where the our row group chair is speaking in moscow taking questions from at times a hostile crowd being pushed on to the response the european union has had thus far with regard to the cypress issue. by the way, criticism coming not just from the people at that gathering, but from fitch which is slamming the way the eu has handled this. and essentially in a press release talking about how it brings into focus the cost of policymakers muddling through approach to the eurozone crisis saying each sovereign and bank crisis is prompting an ad hoc response, exacerbating uncertainty and financial instability. they say there are no meeting

implications for sovereigns. but with a statement like this, you can understand if markets take it that way. high political drama happening down under as aus trail yam prime minister julia gillard faces leadership challenge. >> another twist in the ongoing leadership battle between julia gillard and the man she opposed more than two years ago, kevin rudd with a napped ballot for the party leadership resulting in prime minister gillard being re-elected uncontested. she had lost the support of her party. rudd backer and simon crane today urged the prmt to conduct a leadership ballot and one was held just hours later. the big twist, kevin rudd deciding not to challenge the prime minister for the leadership, but gillard and her deputy, the treasurer wayne swan was reappointed to their respective positions unopposed. prime minister julia gillard says today's vote now settles

the question o leadership once and for all. >> today, the leadership of our political party, the labor party, has been settled and settled in the most conclusive fashion possible. the whole business is completely at an end. it has ended now. >> australian prime minister julia gillard. the countdown now resumes to the federal election which will take place on december the 14th. if current polls are to be believed, julia gillard will lose in a landslide defight to the right leaning liberal party tony abbot. that's the late freft sydney. back over to you. >> and we'll have the latest on this fluid situation in cyprus when we come back. still ahead on the program, chancellor osbourn has looked at growth targets for 2015. we'll go live to westminster. ross westgate will have month reaction to the uk budget when we come back. stay with us.

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british chancellor george osborne is under fire this morning for a budget. the number in the shadow cabinet claims he sucked the confidence out of the uk economy and should waste no time in changing course. but then i guess you would

expect that from the opposition. ross westgate is joining us. he's down there, you know, ross, putting questions, i guess, to people about just how much the british budget is actually going to help growth. there were lots of measures that seemed aimed at pleasing people, everything from a penny off a pint to more help from home buyers we should say that seems to basically look like a trend for builders. >> yeah. because the idea is it's for new homes so the sort is that home builders will gld more homes and there's more people willing to buy them. some think we're back to where bill clinton was with his homes and then the subsequent bust. the chancellor has acknowledged we need private sector generated growth if we're going to get anything going and that's the way to deal with the deficits, of course. and there were some measures

there. no national insurance payments for employees for the first few thousand pounds reducing corporation tax earlier to 20%. infrastructure spending, could it be more? businesses would always want more. but there was acknowledgement he tried while keeping the next fiscally neutral. on the whole, businesses say, not bad, could have done more. i think that will be the summation for them. the key factor, of course, is if you're not going to do more to stimulate your own growth, what happens to the eurozone becomes even more important. and i did speak to the chancellor, george osborne, just a short while ago and i asked him how worried is he about what's going on in cypress? this is what he had to say. >> it is a worrying situation in cypress and i think there's been some sole rans in international markets and elsewhere that they've got to sort these problems out. but obviously, we now need a solution. if i would have concerns if these depositors, less than a hundred thousand euros are caught up in this bailout.

i mean, that is what -- how -- what caused concerns across europe and across the world. and i think the cypriot government understands that and i think the international community also needs to understand that in the way it's intervening in cypress. we should not let what is clearly a very big problem for cypress become a big problem for europe. >> ross, it doesn't necessarily seem his counterparts are doing anything to resolve this issue right now. but also, it didn't exactly look like westminster there. it looks like he was standing on the back porch or something. >> i can't actually see. i don't know which shot you can see. but, yes, big ben should be behind me somewhere. >> i meant behind george osborne. >> sorry. where i interviewed george was in the media center which is just down the road from the house of parliament. that's why. i didn't know if you were talking about my shoulder or that with george.

that's where the journalists go and have breakfast. >> did he, ross, during that brief interview that you had with him or afterwards, express there needs to be more of a sense of urgency as far as britain is concerned to resolve this crisis? >> yes. i mean, i think that would be fair. and i think the interesting thing for britain and british politics is, of course, this initial raid or attempt to raid bank deposits and what goes on here. it does provide more fuel, of course, and the british government, the conservative party has an issue with the rise and the view we would like britain to withdraw from the eu and it does provide more fuel to the fire to the people saying britain needs to do less in europe and look more to the rest of the world. so i think that's also -- there's a political dimension, as well, for the conservative party who are the sort of majority party and coalition government. that's another reason they quite like europe to be cleaned up for

political reasons. we will also get -- you mentioned ed in the introduction. we will be speaking to ed bowles a little later in the program. kelly, back to you. >> ross, perfect. we'll get back to you for that. it's a big issue in britain. britain had flown a jet carrying a million euros to cyprus just dm case they were needed. straight ahead on the program, we'll hear exclusively from aaron levy about his new plans for going global and we'll leave you a look at how futures are trading ahead on wall street after some ugly data out of the eurozone.

welcome back to "worldwide exchange." the euro grooum group chief comes under fire in cyrus. he says the levy on bank depositors is inevitable. russia criticizes the eu's handling of the crisis as the summit between the two sides gets under way. dimitry medvedev says the eu is behaving like a bull in a china shop.

chinese factories posted a rebound in march activity after a slump during the lunar new year, giving hope that at least there a gradual recovery is on track. sdwra you're watching "worldwide exchange," bringing you business news from around the globe. >> and a bit of good news out of britain, briefly, markets were waiting on this figure. sterling is jumping because uk has reported a rebound in february retail sales after a disappointing january. we're seeing car production jumping about 26% year on year. and all this doing a lot to help calm some of the concern that we had seen in earlier figures showing some significant weakness for the uk economy. also getting into the public sector finance data, we can bring you that in just seconds to the message basically being public finances improved in february. again, you can see the sterling reaction there.

0.6%. we'll talk more about the uk public sector finances in just a second. and in the wake of the budget with shadow chancellor ed balls, ross will speak with him in about 10 minutes time. now, it was a big earnings miss for one of the world's top softwaremakers, oracle blaming its expanding sales force for a severe miss in third quarter revenues. that sent shares down as much as 8% in after hours trade. oracle gave weak third quarter guidance. cnbc's chief technology reporter john fortt has all the details from the report. >> oracle out with those very disappointing reports. stock was down as much as 8% after hours. here are the gruesome details. misses on the tom top ask bottom lines. wall street was looking for revenue around $9.4 billion. oracle turned in just shy of $9 billion. nonbacked eps of 64 cents.

oracle turned in 65. as the revenue pretty much fell across the board, new lifeless and cloud revenue was well light. nongap operating margins, just a little bit light, but still in this. and then the guidance, q4 is oracle's big quarter. this is where wall street was hoping for some blowout numbers, looking for around 11.5 billion in revenue, 88 cents of eps, oracle said, no, we're not going to do quite that well, in fact, guided to just a negative 1 to plus 4% growth in revenue for the quarter. wall street better than 5% growth. new revenue will fall a couple of percentage points short of what wall street wanted and hardware product revenue very much light. the cfo says the problem here is not product, it was sales force execution. some newly hired salespeople

weren't able to bring in. she said she's going to guide conservatively. ceo larry emily son said that the turn around in hardware which he had said would come in q4, we would start to see momentum and revenues picking up, now that's been pushed out to q1. we'll have to see how much patience investors have for that, given the big stock drop here with oracle insisting overall the story is intact. for cnbc, i'm jon fortt. >> even as oracle is showing signs of weakness, new starter firms are looking to calling as the sector tightened. just held its first customer event in london. i caught up with founder and ceo aaron leavy there is and asked about his plans for global expansion, why choose london and can why go global now? >> we looked at the demographics that we were work onning with. there was a concentration in the uk. we felt this was a really good central place for us to drive our european effort.

and the focus again is now expanding both pan europe as well as places like japan, singapore, australia and other markets. >> and so where a company maybe five or ten years ago when they're looking at capital investment might be thinking how many computers am i going to buy? today they're thinking -- >> how many web services am i going to rent? >> we think pretty good things. when you move from a model where an enterprise needs to manage infrastructure in their data center and they decide to, instead, rent services over the internet from companies like sales force.com or box or work day or google, we benefit heavily from that transition. because at boxx, we power a cloud based service that helps the store manage and access information. >> the kind of global expansion you're talking about is going to require a massive amount of capital. it's time to move from the venture capital markets. >> we're not yet tapping public markets. although we have worked at later stage investors, but more later stage growth capital and private

equity. we raise about $300 million in funding so far and a lot of that is going towards international expansion, r&d investments, infrastructure expansion internationally and how do we make sure we go after this opportunity in very strategic ways. >> and the investors, are they at this point still willing to give you capital towards what they see is this growth coming in a couple of years time, revenues ultimately the profit source even though you're not seeing it now. >> last year we grew our top line revenue over 5 50%. this year, we'll more than double our revenue. we're still putting up growth numbers that i think are unparallel historically in enterprise software. i think other businesses are seeing similar growth rates companies like work day which recently went public and is doing quite well in the public markets. as long as those trends continue and as long as we are able to maintain that growth rate, i think investors are more than willing and actually, you know, quite focused on investing.

>> finally, cyber security is a huge issue these days and an increasing problem. what are you doing to keep your system safe, to keep data safe for these companies and how much of a challenge is this generally for your company? >> so our primary differentiator is the ability to blend end user stability and end user product with the security and enterprise scaleability that larger organizations need. so we invest in unparallel amounts of energy and investment and r&d and resources and building an incredibly plat fom for our customers. companies like procter & gamble or ebay or ea or mcafee, so large global organizations that do focus on securing their data. that's what we do at box and the vector securities have increased because when you bring your own devices into work, when you can use different applications to work with your data, this increases the number that you asked to be focused on as a business and at box, we help

make our customers more secure because they get better visibility in our data, who is using information and where they access it from. that's what we do. >> their response to the next google? >> we probably won't be focused on self-driving cars or special glasses anytime soon. but we do think there's a large tujt at google like scale. >> now, here is a look at what is happening. as we turn our attention to the u.s. trading session, it does look like a negative start. down about 25 points on the dow. similar magnitude of declines for the nasdaq and the s&p. yesterday we saw stocks bucking a three-day down trend and is higher across the course of europe. on that note, let's check in with european trade today where we are seeing red arrows pretty much across the board, driven not so much by the lack of resolution in cyprus, although that doesn't help, but we just got for the march flash figures. ftse 100 giving up 0. 7%. the xetra dax is down almost 1%

earlier before recovering to some extent. the cac 40 in paris where we saw france in particular down about 1% and the ibe he x 35 down 0.35% off the nose there. we're going to take a quick break. should i perhaps show you the euro board first. the euro/dollar down 0.2%. over here, the sterling, up 0.6%. it was just briefly above the 1.52 level. this after falling below 1.50 in the last couple of weeks on renewed concerns about growth in britain. but today, stronger retail sales data, so much for public borrowing data and is, again, the sense of ceo isn't necessarily going to be doing more accommodation right now all contributing to roadway bound. as i said, we're going to take a short break. but before we do, here is a look at what some of our guests have been telling us about how you make money in these markets. >> i like mexico, the mexican peso. that's a good derivative of the u.s. that we appear to be seeing. and also the charms of the forms in the energy secretarier and that would be another plus for

the mexican safeguard. >> for me, this is the sweet spot of the economic cycle, when you should be in equities. and generally, people talk about equity markets going up 5% to 10% every year. the u.s. has done that three times in 70 years. it never goes up between 5% and 10%. it's more than 10% or 15% and it's generally down. i expect we'll see the s&p close generally higher this year. >> i think the reason the markets is unfoleyed, earnings aren't as good as they should be. that's driving the performance. i.e., it's fundamental webs it's not just sentiment. so it's really at this point a matter of emerging market companies doing better on profitability during earnings. i think that's going to be the catalyst for a catch up in performance we've seen so far this year. [ male announcer ] i've seen incredible things.

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departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. welcome back to "worldwide exchange." this morning where we're continuing to follow developments out of cyprus, by the way, italy still needs to form a government. beppe grillo has come out and said he asked for a mandate to form a government. he did get about, what, 20%, 25% of the vote. not sure whether he would find people to sign up and agree to all 20 points of his plan, one

of which would include calling for a referendum on membership for italy. now we have a second major european union country that warrants a referendum on staying part of that. i refer to britain, first of all. of course, that's part of the european union, not the eurozone. nevertheless, at a five-star movement, wants a referendum on a membership and is wants to try to form a government. meanwhile, over in spain, we're taking a look at how markets perceive the relative risk of on its sovereign debt. yes spain has another auction in which it's raised about $4.5 billion euros in 2015, 2018 and 2023 debt. now, the bid to cover ratio is pretty healthy. in fact, up from the last auction and it looked like yields are down across the board for the most part. you're seeing the reaction in the ten year, still below 5% on this morning. if you're just joining us here on "worldwide exchange" been these are your headlines. the head of the euro group says he takes more responsibility for the cyprus bailout package, but

says a levy on bank dofters is inevitable. russia condemn tess eu's plan. depletory medvedev says they're behaving a like a bull in a china shop. economists say there's little home for a turn around in the second quarter and that would be the seventh straight quarter of recession for europe. and in britain, george osborne is this morning under fire for producing an overtly political budget rather than a budget for growth. the chancellor's cabinet says he has sucked the confidence out of the uk economy. ross westgate joins us now from westminster with more from ed balls. >> yes, ed balls is standing right next to me. let's get to him. he said the chancellor is sucking the confidence out of the economy. the financial markets seemed e prerelaxed with what we heard yesterday. >> i think the potential markets have factored in now for very many months. the economy here in the uk is flat. it's flat lined.

there's no growth. our deficit has been expected to stay high now for many months. the chancellor confirmed yesterday what we've all known for a long time. the national debt is rising year on year. the borrowing is not coming down. britain was an experiment two years ago in rapid austerity. i think the markets here know what the country here in britain knows, it's failed. >> they did come out saying business applauded measures yesterday, which i'm sure he would also applaud. 32 pounds of national insurance. that's going to help job creation, cutting corporate tax rates again. infrastructure spending, he's done that, as well. there are very business friendly measures here and it's the private sector, after all, that's going to get the growth going in this country. >> look, the small business is good. they've been calling for that. good thing to do. i wish it had done much more on housing, infrastructure, anything is better than nothing. the cutting corporation tax, that really only works if companies are investing and is making profits. and the investment was revised down pretty much every year

yesterday. the big picture, though, from a business point of view is britain standing in the world point of view is is the economy growing? are we getting our deficits and debts down? if you had to confirm yesterday, growth and the deficits have stalled. we are on a long, hard road to nowhere here in britain. >> so is everybody in the world, on a long, hard road particularly in developed countries. we saw pmi in eurozone suggesting six quarter hers of negative consecutive growth. and it's the trade rather than government spending or consumption, it's lack of trade overseas that's dragged the economy down. >> well, the forecast yesterday made clear that the fiscal tightening here in britain had reduced growth markedly. clearly, the situation is tough for us, as well.. why is it of the g-20 largest economies, only italy and japan have done worse than britain in the last two years? we weren't in the eurozone. the chancellor had the destiny

of our country in his hands and he said this plan would work and it hasn't. the international monetary fund have been saying for the last year and a half the chancellor slowed the deficit pace of reduction, a temporary tax cut, brings forth infrastructure to get growth moving, he's refused to do that. he's stuck on plan a for two years he said to keep the aaa credit rating. even that is gone now. >> but he's moved forward, hasn't he? the first 10,000 now for individuals before they start paying the tax. are we in a position, though, to actually -- we're not in a position to borrow more, surely we need to cut spending and use that to cut taxes. >> the real wages are falling every year for our country in this parliament, down over five years. our family this april, even with the allowance change is worse off because of the rises in taxes and the cuts and tax credits elsewhere. getting government spending down

was necessary. the tax rise was necessary. but without growth, it can't work. and it's that lack of growth which has choked off this recovery and its deficit reduction plan. he did nothing yesterday. it was just more of the same. and i think around the world people will look tech uk and say if you wanted to know whether in a country even with a floating exchange rate could cut spending as a root to growth, they used to call it expansionary fiscal contraction. dead in the water. >> chancellor, thanks very much for joining us. kelly, back to you. >> great stuff there. and it's good to see you even if it's all the way across the city. coming up, when the the fed stop easing? deutsche bank's top economists think it could be by tend of the year. we'll put some questions to him when we come back. [ female announcer ] what if the next big thing, isn't a thing at all?

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the euro group's leader is doing this as the country scrambles to put together a rescue plan. he says he thinks the levy on bank deposits is inevitable. he also says he takes full responsibility for the original bailout package. >> a package that would have been much bigger than 10 billion simply wouldn't have given any fair chance to a recovery for cypr cyprus. so in that balance between a package not too big allowing for a new future for cyprus, finding a contribution from the cypriot economy itself, it's inevitable in the view of the euro group that a contribution was made from the depositors.

>> now, yesterday, markets may have a different idea or do they? joining us from new york, joe levonra from deutsche bank. you think the fed could exit or start to exit by the end of the year? >> kelly, i think they can really stop the pace of qe. i think that what will happen is over the next two months, job growth will continue to be over 2,000. and i think in that kind of environment, the fed will start to taper the pace of qe. sometimes in q3 and, yes, by the end of this year, i expect the qe to stop. but rates will be very low and the fed's balance sheet will be bloated for quite a long time. >> given the issues in europe, why take the risk? why even hint to markets that they may be exiting? or paps why not leave the accommodative can policies in

place to help support the global economy? >> as we move into the summer, i think at that point the cost of this continued open ended deposit continues. i think they've come to the conclusion they don't need it as much. i think at that point, europe will probably be a little more stable. >> joe, in a word, jobless claims today, then, critically important. >> very important. i think they'll stay well below 350. >> it's an important level to watch. appreciate your time. from thank you, kelly. >> thank you for joining us on the show today. i'm kelly evans. this has been "worldwide exchange." time now for "squawk box" in the u.s. remember, people, keep an eye out for those jobless claims figures. hope you to see you back here tomorrow.